Nippon Steel is acting on news that the US is trying to block the Reuters acquisition

TOKYO (Reuters) – Nippon Steel shares rose on Thursday, outperforming the broader index, after news that the White House plans to block the company’s $15 billion bid for its US Steel bet.

Sources told Reuters on Wednesday that US President Joe Biden was close to blocking Nippon Steel’s takeover of US Steel over national security risks, amid growing bipartisan political opposition to the deal the companies hoped to strike until the end of the year.

Although they lost more than 1 percent in early Tokyo trading on Thursday, Nippon Steel shares recovered to trade 1.5 percent higher by 0144 GMT, outperforming the broader Nikkei, which was flat. US Steel shares fell 17.5%.

With the takeover, Nippon Steel hoped to bring its global crude steel capacity to 86 million tonnes per year, close to its target of 100 million, and add 30-40 billion yen ($209-278 million ) to its profit in the January-March 2025 Quarter.

To win support from the influential United Steelworkers (USW) union, Nippon Steel committed to moving its US headquarters to Pittsburgh, where US Steel is headquartered, investing more than $2.7 billion in union-represented facilities and to ensure that the core senior management as well as the majority of the board members of the US company would be US citizens.

Both Nippon Steel and US Steel said they had not received updates from the Committee on Foreign Investment in the United States (CFIUS) on the deal, adding that they did not believe the acquisition posed national security risks.

“Japan is one of our staunchest allies,” US Steel said in a statement. “We fully expect to pursue all possible options under the law to ensure that this transaction … closes.”

“Nippon Steel strongly believes that the US government should properly handle the proceedings in this matter in accordance with the law,” the Japanese company said in a separate statement.

(1 USD = 143.6500 yen)